Guangzhou ring road under construction
people to work in the newly established industries.
2.30 Much of the development in Guangdong can be uniquely complemented by the skills and services now available in nearby Hong Kong. Hong Kong is, however, also able to use to its own advantage the pool of cheap skilled and unskilled labour across its borders. For example:
(a) Hong Kong based service industries (banking, advertising, marketing and design) are able to support newly emerging industries in Guangdong;
(b)
(c)
some Hong Kong service industries can move their low value-added operations to Guangdong (these have so far included Cathay Pacific's accounts and may soon include the Chinese directory enquiry services for Hong Kong Telecom); and
Hong Kong service industries can cater to consumer demands in Guangdong (Hong Kong is, for example, the tourist destination of first choice for many newly affluent Chinese).
2.31 The historic and kinships links between the two regions presents industrialists and other investors with an incredible competitive advantage that few other regions of the world possess.
Skills of its People
2.32 The Province's greatest strength lies, however, with its people. Their clear determination to do well and better their economic lot (their overseas ties and access to Hong Kong media may have a lot to do with this) has been the real driving force behind much of the recent growth. An adaptability and readiness to acquire new skills and adopt new work and business practices has been attested to by many foreign investors - and their ability to "work the system" to their own advantages, which they learned during the days of
central planning, remains particularly useful while many of the regulations designed for a planned economy are still in force. Their kinship with Hong Kong businessmen has, of course, also given them a great advantage over other areas of China. The Cantonese also have a long history as traders. They are not afraid to take business risks.
2.33 Family ties, although strong, do not prevent young workers from leaving their homes in search of more lucrative employment in the newly industrialising area - indeed it is often responsibilities to the family that drives earners away from the rest of their family. Indigenous agricultural workers are also happy to sub-contract their agricultural responsibilities to outsiders - there are few emotional ties to traditional ways of life. This large pool of labour and the processes whereby experienced labour can progress to more skilled positions (and eventually to management) and be replaced by new migrants gives the province a considerable advantage over more established economies. High labour participation rates (most females work) are also leading to high levels of productivity.
New Competitive, Market Oriented Attitude to Business
2.34 The new socialist market economy (although still largely untested) is now causing competition. between enterprises and forcing unproductive enterprises to become more efficient. Cheap labour and land (despite the caution sounded earlier) has made the province an ideal location for foreign enterprises wishing to reduce their production costs. The wealth created by these new enterprises has, in its turn, created local demands for consumer goods, which the new local enterpreneurs have been in an ideal position to satisfy - success is leading inevitably onwards to even more success. As it was the first region in China to expand its light manufacturing base, Guangdong is now in an ideal position to dominate the domestic market for these goods.
2.35 The large state owned, often heavy industries, still obtain raw materials at preferential prices and have not yet been able to adjust properly to the new market conditions. Much will depend on whether market forces are allowed to dictate the future of these enterprises.
Early Tackling of the Problems of Inadequate Infrastructure
2.36 Although, the lack of infrastructure (highways,
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